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Budget 2017 for Tradesmen and Self-Employed

Another Year, another budget. Gone are the days of the big Celtic tiger giveaways, with a more measured approach taken by this government. And budget 2017 didn’t disappoint in this regard – hailed beforehand as the ‘something for everyone’ budget, everyone did manage to get something out of it. Relief, anger, disappointment, joy……

All that said, let’s have a look at the bullet points of Budget 2017 for Irish Tradesmen and Self-Employed:

Tradesmen’s Take Home Pay:

This is most always the measure of how individuals will gauge the success of a budget. Budget 2017 should put more money into the pockets of Tradesmen over the coming months. Although don’t get too excited, as it is marginal. Here’s how Self-Employed tradesmen will gain:

USC Cuts For Tradesmen

The dreaded USC will be reduced across 3 of the lower brackets by half a percent:

The 1% USC bracket will go down to 0.5%

3% USC bracket will be 2.5%

5.5% USC bracket reduces to 5%

USC kicks in for anyone earning more than €13,000 a year, so it will affect the vast majority. By way of examples, the USC cuts mean that a Tradesman earning €45,000 will gain an extra €230, while those earning above €70,000 will get an extra €353 into their pocket.

Tax Credits For Tradesmen

This has long been a bug bear of many self-employed, with PAYE workers automatically getting higher tax credits when compared to business owners. This budget has gone some way to balancing this out. From Jan 2017 the earned income tax credit has been increased for Self-Employed Tradesmen by €400 per annum to €950. It’s still way behind the €1650 credit given to PAYE workers, but it will increase your take home pay

Budget 2017 Examples for Tradesmen:

We can’t cover every possible scenario here for tradesmen, but here are a few:

Single, with one income from a self-employed Tradesman earning €30,000 will gain €520 per annum / €10 a week.

Single, with one income from a self-employed Tradesman earning €60,000 will gain €703 per annum / €13.50 a week.

A married couple, with one income from a self-employed Tradesman earning €55,000 will gain €778 per annum / €15 a week.

A married couple, with two incomes, one a self-employed Tradesman earning €60,000, other employed with €40,000 will gain €1,040 per annum / €20 a week.

A married couple, with two incomes as self-employed, earning €150,000 and €30,000 per annum will gain €1,305 per annum / €25 a week.

The gains aren’t massive, but as the ad says, every little helps…

Social Protection For Tradesmen

For years we have been highlighting the disparity of social welfare afforded to PAYE workers compared to Self-Employed Tradesmen. Tradesmen get limited access to social welfare payments if things go wrong, no dental, etc.

Well Budget 2017 has gone some way to improving that – but there is still a ways to go. According to Minister for Social Protection Leo Varadkar 2017 will see a normalisation in the protections provided to Self Employed Tradesmen:

"Budget 2017 includes a new deal for up to 380,000 self-employed people who pay PRSI at the S class. They will have new benefits extended to them, including treatment benefit such as free eye and dental tests for the first time, and access to the safety-net of State income supports if they have a serious illness or injury that prevents them from working without having to go through a means test."

Measures to deliver work for Tradesmen

Budget 2017 had a few things in it that will undoubtedly deliver more work for Irish Tradesmen.

First time house buyers.

The budget has provided additional Tax reliefs to anyone buying or building a new home that costs under €600,000. That’s some pad!

The measure will provide a rebate of income tax paid over the previous four tax years, up to a maximum of 5% of the purchase price of the new house. A house up to the value of €400,000 gets the full relief, between €400,000 - €600,000 it is at a reduced rate.

It doesn’t apply to buying a second-hand home.

So how does this affect tradesmen? Apart from those buying a new home, it will serve to increase the number of new home builds. How much, we have no idea. This will however, increase the need for tradesmen to work in these homes whether they work with the developer or come in as direct labour to the Home owner.

Home Renovation Incentive Scheme

The Home Renovation Incentive (HRI) has been extended until 2018. This is a direct stimulus to People getting work on their home, so it will benefit Tradesmen directly.

Other Measures of Interest in Budget 2017:

It was a long speech and a big document – so we won’t cover it all! Here are some of the highlights for Tradesmen:

Selling your business? From January 17, the Capital Gains Tax for entrepreneurs will be reduced from 20% to 10% on the first €1m of the sale price. The remainder (if you’re that lucky!) is taxed at 30%. This compares to 10% of the first £10M in the Uk!

Childcare: A new Childcare Subsidy to be introduced from Sept 2017. It will provide parental means-tested subsidies towards the cost of childcare for children aged six months to 15 years and universal subsidies of up to €80 a month or €900 a year for all children aged between six months and three years.

The Fags. 20 cigarettes will be 50c more expensive. From what we can see it’s the only direct increase in the budget.

Electric Vehicles. The relief from VRT tax on electric vehicles to be extended for another 5 years.

Inheritance Tax: Parents can now pass on €310,000 to their kids without the little fellas having to pay tax. This is an increase of €30k. There are also other changes to the Capital Acquisitions Tax bands. Call an expert!

Landlords: The existing rent-a-room relief is to be increased. With a higher tax ceiling of €14,000 for those looking to rent a room to someone.If you are a Landlord, you’ll see an increase in mortgage interest relief deductibility from 75% to 80%.